Tribunal grants set-off of losses against deemed income under sec 115BBE

The Tribunal allowed the appeal, permitting the set off of current year losses against the deemed income for the assessment year 2014-15. The clarification in Circular No. 11 of 2019 by the CBDT supported the assessee's entitlement to claim the set off of losses against income determined under sec 115BBE until AY 2016-17.

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Issues:
1. Allowability of set off of current year depreciation and business losses against deemed income u/s 69 of the Act.
2. Applicability of provisions of sec 115BBE as applicable to AY 2014-15.

Analysis:
1. The assessee declared additional income of Rs. 2,00,00,000 during a survey, claiming set off of depreciation and business losses against it. The Assessing Officer disallowed the set off, relying on a judicial pronouncement. The CIT(A) upheld this decision, citing a clarificatory amendment to sec 115BBE applicable retrospectively. However, the assessee referred to Circular No. 11 of 2019, which clarified that set off of losses against income under sec 115BBE was allowed till AY 2016-17. As the assessment year in question was 2014-15, the assessee was entitled to the set off. The Tribunal allowed the appeal, granting the set off of current year losses against the deemed income.

2. The issue of applicability of provisions of sec 115BBE to AY 2014-15 was resolved in favor of the assessee based on the clarification provided in Circular No. 11 of 2019 by the CBDT. The Tribunal held that the assessee was entitled to claim set off of loss against income determined under sec 115BBE until AY 2016-17, allowing the appeal and granting the set off of current year losses against the deemed income.

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